This translation has been automatically generated and has not been verified for accuracy.Stock market gains in the past couple of weeks remind us of the potential for investments to rebound from their recent plunge.
Looking for stocks that can help you participate in the stock market’s eventual comeback? Start your search with exchange-traded funds. A reader recently asked for ideas on the best stocks to buy right now to take advantage of the stock market plunge caused by the pandemic. There are bargains to be had for sure in stocks right now – beaten down quality stocks with long-term rebound potential.But the economic difficulties ahead increase the risk of making wrong decisions when picking stocks.
An argument against index-tracking ETFs is that they expose you to the entirety of a stock market decline, whereas actively managed mutual funds or a portfolio of individual stocks can be manoeuvred in ways that make market declines less extreme. But when markets roar back, an index-tracking ETF will follow in lockstep. Over the long term, through market ups and downs, you should expect index-tracking ETFs to outperform a majority of mutual funds.
Stocks could renew their plunge if the fight against the coronavirus hurts the economy more than currently expected. Buying gradually, a strategy known as dollar-cost averaging, will keep you on the right path through any volatility ahead. Your timeline for making investments like this should be 10 years or more. That far in the future, stocks you buy today will very likely be much higher in price.
globemoney Hi there! Did you mean to type out ETF the first time it’s used? I didn’t see the acronym spelled out or explained anywhere.. (I know I can google but it would be nicer to not have to, especially since leaving the article = recipe for distraction)
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